EUROPEAN TRAVEL COMMISION - REPORT TRENDS AND PROSPECTS 2016

European Tourism in 2016: Trends & Prospects (Q1/2016)
EUROPEAN
TOURISM 2016
TRENDS & PROSPECTS
APRIL 2016

1
EUROPEAN TOURISM IN 2016:
TRENDS & PROSPECTS
Quarterly Report (Q1/2016)
A quarterly insights report produced for the Market Intelligence Group
of the European Travel Commission (ETC)
by Tourism Economics (an Oxford Economics Company)
Brussels, April 2016
ETC Market Intelligence Report

2
Copyright © 2016 European Travel Commission
All rights reserved. The contents of this report may be quoted, provided the source is given accurately
and clearly. Distribution or reproduction in full is permitted for own or internal use only. While we
encourage distribution via publicly accessible websites, this should be done via a link to ETC's
corporate website, www.etc-corporate.org, referring visitors to the Research/Trends Watch section.
The designations employed and the presentation of material in this publication do not imply the
expression of any opinions whatsoever on the part of the Executive Unit of the European Travel
Commission.
Data sources: This report includes data from the TourMIS database (http://www.tourmis.info), STR
Global, IATA, AEA and UNWTO.
Economic analysis and forecasts are provided by Tourism Economics and are for interpretation by
users according to their needs.
Published and printed by the European Travel Commission
Rue du Marché aux Herbes, 61, 1000 Brussels, Belgium
Website: www.etc-corporate.org
Email: info@visiteurope.com
ISSN No: 2034-9297
This report was compiled and edited by:
Tourism Economics (an Oxford Economics Company)
on behalf of the ETC Market Intelligence Group
Cover: Banque et Caisse d'Epargne de l'Etat Clock Tower, ID da Image: 212390323
Copyright Sergey Novikov
In memoriam Mr Tom Ylkänen

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TABLE OF CONTENTS
Foreword ..............................................................................................................4
1. Tourism Performance Summary 2016 .............................................................8
2. Tourism Performance Summary 2015 ...........................................................11
3. Global Tourism Forecast Summary ...............................................................13
4. Recent Industry Performance ........................................................................14
4.1 Air Transport ...........................................................................................14
4.2 Accommodation ......................................................................................18
5. Special Feature ..............................................................................................19
6. Key Source Market Performance...................................................................21
6.1 Key Intra-European Markets...................................................................21
6.2 Non-European Markets...........................................................................25
7. Origin Market Share Analysis.........................................................................28
7.1 United States...........................................................................................29
7.2 Canada....................................................................................................30
7.3 Mexico.....................................................................................................31
7.4 Argentina.................................................................................................32
7.5 Brazil .......................................................................................................33
7.6 India ........................................................................................................34
7.7 China.......................................................................................................35
7.8 Japan ......................................................................................................36
7.9 United Arab Emirates..............................................................................37
7.10 Russia ...................................................................................................38
8. Economic Outlook ..........................................................................................39
8.1 Overview .................................................................................................39
8.2 Eurozone.................................................................................................42
8.3 United Kingdom.......................................................................................43
8.4 United States...........................................................................................44
8.5 Japan ......................................................................................................45
8.6 Emerging Markets...................................................................................46
9. Appendix 1 .....................................................................................................50
10. Appendix 2 ...................................................................................................52

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FOREWORD
POSITIVE START INTO 2016 UNDER THE CLOUDS OF UNCERTAINTY
An outstanding tourism performance in Europe in 2015 augurs well for
continued growth into 2016 following the 5% increase in international tourist
arrivals recorded last year. According to the World Tourism Organization
(UNWTO) European Tourism has been fluctuating over the past number of
years, yet remaining firm on the path of growth since the pre-crisis period
1
.
Based on data reported so far, European tourism gets off to a good start in
2016. Nevertheless, safety and security concerns and recent developments in
passport-free travel are at risk of hampering the region’s tourism growth.
Despite the on-going economic recovery of the Eurozone, reduced oil prices
and favourable exchange rates spurring travel to and from the region, the
impact of unfortunate events call for closer monitoring to assess the weight on
travel in the long term.
INTRA-REGIONAL MARKETS – KEY DRIVERS OF THE REGION’S
GROWTH
Almost all monitored destinations saw robust results in both overnights and
arrivals over January-February 2016
2
, however, figures are expected to
moderate as the year progresses. Among the top performers worldwide, strong
growth was posted by Spain (+12.5%) – reflecting their efforts to fight
seasonality – followed by Austria and Germany (both +5%). In line with the past
year’s trend, Turkey (-8.5%) saw arrivals from its key source markets dampen
largely due to on-going political and safety challenges.
1
UNWTO (2015), World Tourism Barometer, Vol. 13, January 2015.
2
Regularly updated data can be obtained from TourMIS (www.tourmis.info).
-6
-4
-2
0
2
4
6
8
2008 2009 2010 2011 2012 2013 2014 2015*
* Provisional figure
Source: World Tourism Organisation (UNWTO)
% change year ago
International Tourist Arrivals to Europe
13
The number of
European destinations
reporting growth in 2016 to
date
16 destinations have
reported on tourism
performance in 2016

5
Despite recent industry strikes and some fluctuations, early results suggest the
airline industry remains aided by lower fuel costs and improving economic
indicators in the Eurozone. European airline passenger load factor rose to
82.6% so far in 2016, although this is a lower peak than that posted in previous
years. On the other hand, European airline capacity growth stabilised by mid-
Q1 to its average of 6.5%.
The European Commission’s Eurobarometer survey
3
revealed that 50% of
survey respondents intend to go on holidays without changing their plans. The
proportion of those that see their travel plans influenced by the economic
situation are more inclined to adjust their travel plans accordingly: 10% will not
go on holidays at all, 33% will take a short trip (up to three consecutive nights),
and 17% will spend less.
3
European Commission (2016), Preferences of Europeans Towards Tourism, Flash Barometer 432.
70
72
74
76
78
80
82
84
86
88
90
Q1 Q2 Q3 Q4
2014
2015
2016
Source: AEA
Weekly load factor, %
European Airlines Passenger Load Factor
0
10
20
30
40
50
60
70
80
90
100
EU28 Germany United
Kingdom
France Netherlands Italy
Not changing travel plans
Not going on holidays this year
Spending less
Take a short trip
Source: European Commission, Flash Eurobarometer 2016
% of total respondents
Preferences of Europeans Towards Tourism, 2016
83%
Peak of European airline
passenger load factor in
2016
Based on data for Q1

6
GROWTH PROJECTION TO BE SUSTAINED BY LARGEST LONG HAUL
MARKETS
4
European tourism continues to benefit from the recovering economies of key
source markets which exhibit moderate but sustained growth, with Germany,
the United Kingdom, and France remaining at the top. Germany leads in terms
of outbound volume and tourism expenditure stemming from strengthening
economic growth, a robust labour market and increased private consumption. A
similar scenario applies for the UK, owing to favourable exchange rates for
some destinations, increased consumer confidence, strong spending power
and tapering unemployment levels presumably contributing to a bump in travel
demand.
The US outbound market accounts for 5% of the share of international tourist
arrivals to Europe (25.7 million in 2015) and is expected to increase to 6.2% on
average towards 2020. This upward trend is encouraged by several factors:
appreciation of the US dollar stimulating outbound travel, price competitiveness
of European destinations, continued employment growth, rising disposable
income, and increased consumer spending. On the other hand, China remains
the second largest long haul source market for Europe, although accounting for
a shy 2% of the share of international tourist arrivals. Despite concerns of the
slowing Chinese economy and the implementation of the Biometric Visa system
hampering outbound travel, tourist flows from this market remain robust. For
Japan, rising real wages are expected to support consumer spending whereas
across the Atlantic a gloomy picture in outbound travel is expected for Brazil, as
the economy struggles to pull out of recession. Although performance from the
US and Chinese markets has been strong based on available figures, data
should be interpreted with extreme caution as the impact of recent terror
attacks in Europe have yet to be observed in the coming months.
Travel demand from the Russia will continue to follow a downward trend in
2016 with more than half of reporting destinations recording negative figures in
early 2016. On the bright side, with an economy in recession, the depreciation
of the rouble, and lower oil prices, economic trends seem to be levelling-off
recovering from a hard recession in the previous years.
“IN UNION THERE IS STRENGTH” – AESOP
Europe is par excellence the number one tourist destination worldwide, driven
by the sustained demand from mature intra-regional and emerging long haul
travel markets. Nevertheless, while Europe is also admired for its quality,
diversity and safety, legal (especially visa requirements) and perceptual
barriers continue to inhibit tourism flows. In order to remain competitive in the
sector and to foster sustainable growth, Europe must tackle these challenges
and leverage the rewards.
“Tourism is one of Europe’s most important industries and it constitutes a
powerful tool to foster economic development and employment growth. Amidst
increased competition and unpredictable events, European leaders within the
4
Outbound travel forecasts from US, Canada, China and Brazil are available on the ETC Executive Dashboard: http://etc-
dashboard.org/dashboard/market?3. The service is available to ETC members only.

7
sector are called to jointly co-operate to enhance the visibility of Europe and
safeguard its image as a safe and welcoming tourist destination”, said Eduardo
Santander, Executive Director of the European Travel Commission.
Jennifer Iduh (ETC Executive Unit)
With contributions from the ETC Market Intelligence Group

8
1. TOURISM PERFORMANCE
SUMMARY 2016
All but two reporting destinations enjoyed a greater number of visitors in early
2016 compared to 2015. As has been the case for the past number of years,
Iceland was once again the biggest European growth destination according to
arrivals data for the first three months of 2016.
Slovakia also posted a very positive start to the year with arrivals and nights
30.1% and 23.5% higher than in the same period last year. This based on just
data for the month of January, but there is no reason why such growth cannot
be sustained following on from momentum gained during last year’s rebound
after a poor 2014. The only source markets from which arrivals in Slovakia did
not grow in double digit terms were Switzerland and India. Furthermore, India
was the only market from which arrivals to Slovakia were lower compared to
January 2015
Visits to Serbia and Romania also grew strongly based on data to February
with much of this growth coming from EU source markets. Arrivals from some
longer haul markets on the other hand have weighed on growth. In the case of
Serbia arrivals from Canada, China, and Japan were all lower than in the same
period of 2015; while in the case of Romania arrivals from Canada and Japan
were lower. However, both countries were amongst only a few markets which
saw arrivals growth from Russia, up 18.9% and 24.9% respectively.
An overvalued Swiss franc no longer pegged to the euro has resulted in a poor
start to 2016 for Switzerland. Both arrivals and nights to Switzerland have fallen
by 3.1% and 6.8% respectively in the first two months of the year compared to
the same period in 2015. However, as the impact of this exchange rate shock
fades, Switzerland should begin to see some growth as the year progresses,
and indeed, this is already evident for some long haul markets such as the US
and India.
-10
-5
0
5
10
15
20
25
30
35
40
Iceland
Slovakia
Serbia
Romania
Montenegro
Poland
Spain
Denmark
Malta
Portugal
Croatia
Hungary
Sweden
Finland
Norway
Luxembourg
Austria
Germany
Estonia
Bulgaria
Monaco
Switzerland
Turkey
Arrivals
Nights
Source: TourMIS *Date varies (Jan-Mar) by destinations
2016 year-to-date*, % change year ago
Foreign visits and overnights to select destinations
21
The number of
European destinations
reporting growth in 2016 to
date
23 destinations have
reported on tourism
performance in 2016

9
Turkey has seen lower arrivals from all monitored source markets according to
data for the first two months of the year, with the exception of the Netherlands
from which arrivals grew by a modest 0.8% compared to the same period last
year. Lower demand is due to a combination of political unrest and the threat of
terrorism. Attacks in Turkeys have followed threats (by the same group which
claimed responsibility for attacks carried out in tourist resorts in Tunisia and
Egypt) and in excess of 100 people have been killed in terrorist attacks across
Turkey in 2016 alone. This will only continue to discourage some tourists from
visiting Turkey and the prospects for the year are not good.
The terrorist atrocities committed in Belgium in March are expected to affect
growth in its tourism sectors, but currently there are no data available to
quantify this impact. Overall, however, the impact of the attacks is likely to be
short-lived.
This same threat feeds into another key issue facing Europe’s prospects in
2016. The future of the Schengen Area hangs in the balance. At the beginning
of the year a number of countries reneged on the Agreement, reportedly in
order to stem the heavy flow of refugees. The increased threat of terrorism was
also cited as the key reason for France and Malta reinstating border controls.
At the peak of the refugee crisis nine countries within the Schengen Area had
reinstated some border controls – over one third of the countries that make up
the Area. This is likely to have a detrimental impact on trips made to these
countries from within Europe. Cross-border flows within Europe are likely to be
more affected by additional border checks than long haul arrivals which are
already subject to checks on arrival in the continent. It is clear that a large
share of the sector is at risk since around three-quarters of European travel
involves cross-border flows between Schengen countries. Tourism Economics’
initial estimate is that a reversal of Schengen Area freedoms and the imposition
of checks at all borders would reduce arrivals in the region by around 2% per
annum, relative to a baseline of no policy change as a conservative measure
based on an analysis of past changes in visa policies. This impact will vary
according to the actual implementation of any change and in the longer-run a
larger impact on long-haul travel may be evident if tour operators change
itineraries to avoid lengthy waits at borders on multi-destination trips.
2%
The annual reduction of
arrivals at European borders
per annum if Schengen
freedoms are reversed
A number of countries within
the Schengen Area are
reneging on the Agreement
due to the refugee crisis

10
Tourism Performance, 2016 Year-to-Date
Country % ytd to month % ytd to month
Austria 5.3 Jan-Feb 2.9 Jan-Feb
Bulgaria 4.7 Jan-Feb
Croatia 8.1 Jan-Jan 10.7 Jan-Jan
Denmark 12.3 Jan-Feb
Estonia 4.8 Jan-Feb 0.8 Jan-Feb
Finland 8.1 Jan-Jan 4.1 Jan-Jan
Germany 5.2 Jan-Feb 5.3 Jan-Feb
Hungary 9.6 Jan-Feb 9.2 Jan-Feb
Iceland 35.5 Jan-Mar
Luxembourg 6.9 Jan-Feb
Malta 11.7 Jan-Feb 9.6 Jan-Feb
Monaco 0.1 Jan-Feb
Montenegro 6.3 Jan-Feb 17.0 Jan-Feb
Norw ay 7.0 Jan-Feb
Poland 11.9 Jan-Feb 13.2 Jan-Feb
Portugal 11.0 Jan-Jan 10.2 Jan-Jan
Romania 19.5 Jan-Feb
Serbia 23.9 Jan-Feb 27.1 Jan-Feb
Slovakia 30.1 Jan-Jan 23.5 Jan-Jan
Spain 12.5 Jan-Feb 10.6 Jan-Feb
Sw eden 8.9 Jan-Feb
Sw itzerland -3.1 Jan-Feb -6.8 Jan-Feb
Turkey -8.5 Jan-Feb
Source: TourMIS, http://w w w .tourmis.info; available data as of 27.4.16
Measures used for nights and arrivals vary by country
See TourMIS for further data including absolute values
International Arrivals International Nights

11
2. TOURISM PERFORMANCE
SUMMARY 2015
In 2015 28 reporting destinations recorded an increase in either visitor numbers
or overnights (or both) compared to 2014. This growth was spurred by the
relative weakness of the euro against the US dollar and falling oil prices.
Iceland was the top performing European destination having welcomed 30.2%
more foreign visits compared to 2014. This marked the fourth consecutive year
in which Iceland was the leading European growth destination. Over 2012 to
2015 (inclusive) Iceland grew an average 24% per annum. In addition, growth
in each year between 2012 and 2015 was greater than in the previous year.
Romania was also a top growth destination with a reported 16.9% more visitors
in 2015 compared to 2014. At the beginning of 2015 Romania was one of only
two countries which enjoyed visits growth from Russia (the other being
Montenegro). However, as Russian demand in general weakened and relations
between the two nations worsened, this growth proved to be unsustainable.
Visits to Ireland grew strongly in 2015 (by 13.7% compared to 2014). This full
year growth figure was higher than year-to-date growth to August indicating
that Ireland rallied towards the end of the year and its popularity transcends the
summer months. Some of this growth may have come at the expense of the UK
thanks to relative euro weakness against the pound which made Ireland a more
price-attractive destination.
Switzerland saw visitor arrivals fall from many of its key source markets in
2015, including Germany, France, and Italy. This is unsurprising given the
Swiss National Bank’s decision to free the Swiss franc from its peg to the euro
in order to safeguard it from the euro’s depreciation against the US dollar. As a
result Switzerland became relatively more expensive when priced in euro
terms. However, US and Indian visitor growth has compensated somewhat for
falling numbers of visitors from elsewhere in Europe.
Turkey also saw arrivals from many of its key source markets fall in 2015. Part
of the reason for this was due to political unrest and the threat of terrorism.
Events in popular tourist resorts in Tunisia and Egypt in 2015 made potential
visitors uneasy in light of threats made against Turkey by those who claimed
responsibility for those aforementioned attacks. Indeed, these threats were
acted upon and many lives were lost in multiple acts of terrorism committed
across Turkey in 2015.
28
The number of
European destinations that
reported growth in 2015
34 destinations submitted
tourism performance data in
2015

12
Tourism Performance, 2015 Year-to-Date
Country % ytd to month % ytd to month
Austria 5.6 Jan-Dec 2.6 Jan-Dec
Belgium 1.8 Jan-Dec 1.3 Jan-Dec
Bulgaria -1.2 Jan-Nov
Croatia 8.3 Jan-Dec 6.8 Jan-Dec
Cyprus 8.9 Jan-Dec -7.0 Jan-Sep
Czech Rep 7.1 Jan-Dec 4.9 Jan-Dec
Denmark 6.8 Jan-Dec
Estonia -2.7 Jan-Dec -3.8 Jan-Dec
Finland -4.0 Jan-Dec -3.6 Jan-Dec
Germany 5.9 Jan-Dec 5.7 Jan-Dec
Greece 7.6 Jan-Dec 0.6 Jan-Dec
Hungary 6.1 Jan-Dec 4.6 Jan-Dec
Iceland 30.2 Jan-Dec
Ireland Rep 13.7 Jan-Dec
Italy 4.8 Jan-Oct 2.4 Jan-Oct
Latvia 3.1 Jan-Dec -0.1 Jan-Dec
Lithuania 1.4 Jan-Dec -0.1 Jan-Dec
Luxembourg -0.3 Jan-Dec
Malta 6.0 Jan-Dec 5.1 Jan-Dec
Monaco -2.9 Jan-Dec
Montenegro 15.5 Jan-Nov 20.0 Jan-Nov
Netherlands 7.6 Jan-Nov 8.3 Jan-Nov
Norw ay 10.7 Jan-Dec
Poland 4.0 Jan-Dec 5.9 Jan-Dec
Portugal 9.7 Jan-Dec 7.3 Jan-Dec
Romania 16.9 Jan-Dec
Serbia 10.1 Jan-Dec 11.5 Jan-Dec
Slovakia 17.1 Jan-Dec 14.4 Jan-Dec
Slovenia 11.6 Jan-Dec 7.7 Jan-Dec
Spain 4.0 Jan-Sep 2.3 Jan-Sep
Sw eden 13.6 Jan-Dec
Sw itzerland 1.6 Jan-Dec -1.7 Jan-Dec
Turkey -1.4 Jan-Nov
UK 4.0 Jan-Sep
Source: TourMIS, http://w w w .tourmis.info; available data as of 13.4.16
Measures used for nights and arrivals vary by country
See TourMIS for further data including absolute values
International Arrivals International Nights

13
3. GLOBAL TOURISM FORECAST
SUMMARY
Tourism Economics’ global travel forecasts are shown on an inbound and outbound basis in the
following table. These are the results of the Tourism Decision Metrics (TDM) model, which is updated
in detail three times per year. Forecasts are consistent with Oxford Economics’ macroeconomic
outlook according to estimated relationships between tourism and the wider economy. Full origin-
destination country detail is available online to subscribers.
TDM Visitor Growth Forecasts, % change year
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
d e f f f d e f f f
World 4.2% 4.3% 3.9% 4.6% 4.8% 3.8% 4.8% 4.0% 4.8% 5.0%
Americas 8.3% 4.8% 2.9% 4.4% 4.5% 7.3% 5.1% 3.0% 4.4% 4.7%
North America 9.4% 3.0% 3.5% 4.6% 4.6% 7.8% 5.2% 4.3% 5.1% 5.1%
Caribbean 5.3% 7.5% 3.0% 3.9% 4.3% 8.3% 6.9% 4.2% 4.4% 4.5%
Central & South America 6.8% 8.7% 1.3% 4.2% 4.4% 5.5% 4.4% -1.7% 1.9% 2.9%
Europe 2.1% 4.3% 3.0% 4.1% 4.1% 0.8% 3.1% 3.3% 4.4% 4.3%
ETC+4 4.5% 4.9% 2.4% 3.7% 3.7% 3.7% 4.8% 3.5% 4.2% 4.0%
EU 4.5% 5.4% 3.3% 3.5% 3.4% 3.4% 4.6% 3.5% 4.3% 4.0%
Non-EU -5.9% 0.4% 1.8% 6.4% 7.0% -8.5% -2.8% 2.3% 4.9% 5.7%
Northern 3.5% 5.7% 3.6% 4.3% 4.2% 3.3% 6.9% 3.6% 4.1% 4.1%
Western 2.3% 3.8% 2.8% 2.9% 2.4% 2.4% 2.8% 3.4% 4.5% 4.0%
Southern/Mediterranean 7.1% 4.6% 1.6% 4.2% 4.5% 5.5% 5.7% 3.2% 3.5% 4.0%
Central/Eastern -6.4% 4.0% 4.9% 5.2% 5.6% -4.2% -1.1% 3.1% 5.3% 5.9%
- Central & Baltic 4.3% 8.3% 2.7% 3.6% 3.9% 8.5% 6.9% 4.5% 4.8% 4.3%
Asia & the Pacific 5.6% 5.2% 6.9% 5.9% 6.3% 7.4% 8.3% 6.5% 6.2% 6.7%
North East 7.3% 4.5% 7.2% 6.7% 6.6% 8.0% 12.1% 6.8% 6.4% 6.8%
South East 2.8% 5.6% 6.2% 4.6% 6.0% 5.8% -0.9% 6.2% 5.2% 6.4%
South 8.3% 7.4% 6.7% 6.1% 7.0% 10.5% 4.9% 7.4% 7.6% 8.9%
Oceania 5.9% 7.0% 7.8% 6.9% 4.4% 3.7% 3.3% 1.9% 5.5% 3.9%
Africa 1.9% -1.0% 2.1% 3.5% 4.7% 1.7% -0.7% 1.8% 2.6% 3.8%
Mid East 8.6% 4.4% 5.4% 5.6% 6.5% 10.9% 9.1% 3.4% 5.0% 5.9%
* Inbound is based on the sum of the country overnight tourist arrivals and includes intra-regional flows
** Outbound is based on the sum of visits to all destinations
The geographies of Europe are defined as follows:
Northern Europe is Denmark, Finland, Iceland, Ireland, Norway, Sweden, and the UK;
Western Europe is Austria, Belgium, France, Germany, Luxembourg, Netherlands, and Switzerland;
Source: Tourism Economics
Southern/Mediterranean Europe is Albania, Bosnia-Herzegovina, Croatia, Cyprus, FYR Macedonia, Greece,
Italy, Malta, Montenegro, Portugal, Serbia, Slovenia, Spain, and Turkey;
Central/Eastern Europe is Armenia, Azerbaijan, Bulgaria, Czech Republic, Estonia, Hungary, Kazakhstan,
Kyrgyzstan, Latvia, Lithuania, Poland, Romania, Russian Federation, Slovakia, and Ukraine.
data/estimate/forecast ***
Outbound**Inbound*

14
4. RECENT INDUSTRY PERFORMANCE
INDUSTRY PERFORMANCE IS ROBUST
 Year-to-date RPK growth in 2016 is outpacing 2015 in most regions.
 Recession in Latin America has weighed on regional RPK growth.
 The deterrent of further terror attacks in Europe appears to have been short-lived.
 A strong dollar helps bring travel growth from the Americas to Europe.
4.1 AIR TRANSPORT
Revenue Passenger Kilometres (RPKs) were higher in 2016 based on data to
February in all world regions with the exception of Latin America compared to
the same period of 2015. This is a very promising start to the year, and most
notably for Africa, Asia & Pacific, and the Middle East where RPK growth
exceeded 10%. This compares to world RPK growth of 7.8%. Fragility in some
emerging market economies in the Asia & Pacific region remains a risk, but
reportedly weaker regional trade, which might stifle some business-related
travel, has yet to manifest itself in RPK performance.
Latin America entered its second straight year of recession in 2016. This has
been driven largely by the deep recession in Brazil, but has also been
compounded by recessions in Venezuela and Argentina. Invariably, both
business and leisure-related travel suffer when a country is in the throes of
economic contraction. In the case of Brazil, this summer’s Olympic Games in
Rio de Janeiro are only expected to provide temporary respite, and with
recoveries in Venezuela and Argentina also a distant prospect, RPK growth in
the region is unlikely to surpass that of 2015 at any point this year.
Africa Asia/Pacific Europe Latin
America
Mid. East N. America World
0
2
4
6
8
10
12
14
2014
2015
2016 ytd
Source: IATA
% year, RPK
Annual International Air Passenger Growth
7.8%
The rate of World RPK
growth in 2016 to date
YTD growth based on data
to February

15
Despite a surge in terrorist activity in Europe, coupled with some industry strike
action in France and Italy, RPK growth has remained resilient with each month
since November growing at a greater rate than in the same month one year
prior. Furthermore, with each passing month RPKs have been growing at an
increasing rate compared to the month before.
Data from the Association of European Airlines (AEA) indicated higher
European airline capacity throughout the first quarter of 2016 compared to
2015, albeit with some fluctuations. However, by mid-Q1 the rate of capacity
growth normalised from which point capacity has continued to grow by around
6.5% relative to the comparable period of 2015.
Airlines appeared reluctant to increase capacity by any significant amount over
the past year, seemingly in order to maintain high load factors and to protect
fares, but lower costs and prices may now be driving some increased capacity;
oil price movements typically have a lagged impact on airlines due to hedging.
Africa Asia/Pacific Europe Latin
America
Mid. East N. America World
0
2
4
6
8
10
12
14
Nov-15
Dec-15
Jan-16
Feb-16
Source: IATA
% year, RPK
Monthly International Air Passenger Growth
-15
-10
-5
0
5
10
15
20
Mar-06
Aug-06
Jan-07
Jun-07
Nov-07
Apr-08
Sep-08
Feb-09
Jul-09
Dec-09
May-10
Oct-10
Mar-11
Aug-11
Jan-12
Jun-12
Nov-12
Apr-13
Sep-13
Feb-14
Jul-14
Dec-14
May-15
Oct-15
Total
3mth mav
Source: IATA
% year, RPK
International Air Passenger Traffic Growth

16
Oil prices are no longer in decline but remain at a level last seen over ten years
ago. An OPEC meeting in April concluded without an agreement between
OPEC members (excluding Iran), as well as Russia and other non-OPEC
members, to freeze production at January production levels. In any case, such
an agreement would have only a marginal effect on eroding global excess
supply and boosting prices.
Passenger load factor appears to have followed a broadly similar pattern to
2014 and 2015, with some deviations to reflect the variable timing of the Easter
holiday period. So far in 2016 PLF has peaked at 82.6%. This is slightly lower
than peaks observed during the equivalent periods of 2014 and 2015. For 2016
to date, PLF has averaged 78% which is lower than in these prior years.
Travel between Europe and Asia increased at a faster rate than total European
airline passenger growth throughout most of 2014 but slowed later in the year
and into 2015. Although growth picked-up again towards the end of 2015 and
once again outpaced total European growth, a significant slowdown was
notable in the latter weeks of 2015. In 2016 total European airline passenger
growth began to outpace European-Asian airline passenger growth. This may
-2
0
2
4
6
8
10
12
14
Q1 Q2 Q3 Q4
2014
2015
2016
Source: AEA
ASK, 4 week moving average, % change year ago
European Airlines Capacity
70
72
74
76
78
80
82
84
86
88
90
Q1 Q2 Q3 Q4
2014
2015
2016
Source: AEA
Weekly load factor, %
European Airlines Passenger Load Factor
83%
Peak of European airline
passenger load factor in
2016
Based on data for Q1

17
be related to fears regarding recent terrorist attacks but is also consistent with
some slowdown in demand from China and other emerging markets as well as
continued modest growth from Japan. By the end of Q1 2016, in growth terms
both flows had diverged to an unprecedented extent: so far in 2016 the average
percentage point (pp) difference between them is 2.5. In 2015 this gap
averaged just 0.3pp.
Air passenger flows between Europe and the Americas continued to grow at a
faster rate than total scheduled travel to and from Europe for all but a few
weeks of 2015. This trend continued into 2016 at which point the two flows also
diverged to an unprecedented degree. So far in 2016 the average pp difference
between is 5.3. In 2015 this gap averaged 1.7pp. The greatest pp difference
observed in 2016 was 9.8. United States outbound travel to Europe has been
particularly strong due to the relative strength of the dollar against key
European currencies, (most notably the euro) as well as favourable economic
conditions in the United States.
-4
-2
0
2
4
6
8
10
12
14
16
Asia
Total
Source: AEA
RPK, 4 week moving average, % change year ago
European Airline Passenger Traffic: Asia
-5
0
5
10
15
20
Americas
Total
Source: AEA
RPK, 4 week moving average, % change year ago
European Airline Passenger Traffic: Americas
9.8pp
The gap between Europe-
Americas and total European
airline passenger growth in
2016
This was the biggest
observed pp difference in
2016

18
4.2 ACCOMMODATION
Global accommodation sector performance was mixed in the first quarter of
2016. The worst performing region was the Middle East & Africa where all three
measures of Occupancy, ADR and RevPAR showed a downturn compared to
the first quarter of 2015. At the same time, all other regions boasted at least
one positive performance measure.
In Asia/Pacific occupancy increased slightly by 1.7% compared to the first three
months of 2016. However, average daily rates (ADR) in the region fell by 4.9%
in US dollar terms and 4.2% in euro terms over the same period. As a result,
revenue per available room (RevPAR) also fell.
In the Americas, room rates continued to rise in US$ terms (+2.4%) despite
some fall in occupancy rates (-0.7%) in the first three months of 2016, although
performance varies across the sub-regions. South America’s accommodation
sector has felt the pinch of the recessions faced by Argentina, Brazil, and
Venezuela, to name just a few, with all measures lower compared to the same
period of 2015 and RevPAR down almost 20% in the quarter. By contrast North
American occupancy was only marginally lower than in the prior year, and
close to the typical average, allowing hotels to continue to exercise pricing
power and raise rates indicating some optimism regarding future growth.
In Europe as a whole, accommodation sector performance was rather
subdued, with occupancy growing by 0.8% compared to the same period in
2015. ADR fell by an equivalent amount and RevPAR was unchanged.
Within the European total, occupancy rates grew by 3.4% in Eastern Europe,
almost offsetting the 3.7% reduction in ADR compared to 2015. RevPAR was
0.5% lower in 2016 Q1 as a result. Occupancy in several countries is
rebounding from the extreme falls experienced in 2014 and 2015 associated
with the Russia-Ukraine crisis which marred tourism to the region. Occupancy
is only now just above 50%, however, and it will take some time yet to restore
pre-crisis occupancy levels as well as the confidence to significantly raise ADR.
Asia/Pacific Americas Europe Middle East/Africa
-12
-10
-8
-6
-4
-2
0
2
4
Occ
ADR*
RevPAR*
Source: STR Global
Jan-Mar year to date, % change year ago
Global Hotel Performance
* ADR and RevPAR denominated in USD except for Europe
0.8%
The rate of occupancy
growth in Europe in 2016
Based on 2016 year-to-date
data to March

19
5. SPECIAL FEATURE
THE ECONOMIC IMPLICATIONS OF BREXIT
The UK government has pledged to hold a referendum on 23
rd
June on whether
Britain should remain a member of the EU by the end of 2017. Assuming a vote
to leave, the government will likely face an intensive, time-constrained period of
just two years in which to conclude a new deal covering trade and market
access that will govern Britain’s relationship with the EU for, potentially,
decades to come.
The implications of Brexit for the UK economy, business, consumers, and
tourists could be substantial and far-reaching. The possibilities for what kind of
a trade deal the government manages to cut are many and varied, but
regardless, in the event of Brexit, whichever trade settlement is adopted and
whichever scenario comes to pass, there will be a long term structural impact
on the UK and EU economies. Britain is the EU’s second largest economy and
almost half of all its overseas investment comes from the EU, as do a similar
proportion of its export revenues. In tourism terms, Britain is the EU’s second
largest source market and its sixth largest destination market.
Research conducted by Oxford Economics suggests that the long-term
economic risks and opportunities presented by EU withdrawal are strongly
asymmetric. Certainly, although any upside effects appear to be limited and the
worst-case scenarios are not catastrophic, they would impose a significant long
term cost on the UK economy. The worst-case scenario would suggest a
decline of almost 4% in real GDP by 2030 compared to what it would be if
Britain remained within the EU.
In the nearer term, some significant disruption would be evident and the path of
quarterly GDP growth could be 0.6pp lower on average over the following two
years should the UK leave the EU versus remaining a member state. At its
greatest this growth gap is estimated by Oxford Economics to reach almost
1.0pp in late 2017, while other sources estimate a larger potential impact.
Forecast
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Brexit
Baseline
Source: Oxford Economics
% year
UK GDP Growth
4%
Amount of GDP lost if Britain
left the EU
Versus GDP if Britain
remained within the EU by
2030

20
Brexit, if badly managed, would impose significant costs on UK citizens and
businesses. In the worst-case scenario, the UK could see as much as £1,027
wiped off its per capita income by 2030 (in today’s prices). At the other end of
the spectrum, the best-case suggests a small rise in income per head of £38 by
2030 is possible.
In any case, it will be impossible to avoid some degree of trade destruction in
which UK trade volumes fall as a share of GDP. This reflects the increased cost
of trade between the UK and the EU, which, in turn, encourages firms and
consumers, in both the UK and the rest of the EU to consume domestically-
produced goods. In the worst-case exports could fall by as much as 8.8% and
imports by as much as 9.4% compared to what they would be if Britain
remained within the EU.
For businesses operating in the UK the impact on investment would be marked.
There is a very wide range of potential effects on business investment. In the
worst-case scenario private sector business investment would be £21.1 billion
(0.8% of GDP) lower in today’s money by 2030 compared to what it would be if
Britain remained within the EU. This is equivalent to each private sector
organisation in the country investing over £4,000 less than it would otherwise
have done. Impacts will also be very noticeable in the short-term as the
uncertain environment will dissuade potential investors from spending within
the economy. Indeed, the increase in political and economic uncertainty in the
run up to the referendum will dampen investment activity in 2015 and anecdotal
evidence suggests that this is already evident.
Large depreciation in sterling against all major currencies have been estimated
under Brexit in the sort-term outlook, arising from the uncertainty and reduced
investment, and with significant impacts for foreign travel to destinations both
within the EU and further afield. Weaker sterling values in the past five years
have been associated with some more subdued outbound travel demand:
tourism departures in 2015 remained lower than pre-recession peak levels
achieved in 2006 when the currency was stronger. Further depreciation,
coupled with the reduced GDP and average wealth following Brexit, would
erode the outbound tourism growth in the baseline outlook.
Forecast
1.00
1.05
1.10
1.15
1.20
1.25
1.30
1.35
1.40
1.45
1.50
Brexit
Baseline
€/£
Euro/Pound Exchange Rate
£21.1bn
The total amount of lost
business investment by 2030
This is the worst-case
scenario if Britain left the EU
versus remaining a member

21
6. KEY SOURCE MARKET
PERFORMANCE
2016 STARTS STRONG
 European travel demand continues to grow across the majority of markets.
 Lower oil prices and weak euro aid European inbound tourism growth.
 Economic slowdown in China a distant worry?
 Schengen Area in limbo amid terrorism concerns and a worsening refugee crisis.
Trends discussed in this section in some cases relate to the first three months of the year although
actual coverage varies by destination. For the majority of countries February or March will be the
latest available data point.
Further detailed monthly data for origin and destination, including absolute values, can be obtained
from TourMIS, http://tourmis.info.
6.1 KEY INTRA-EUROPEAN MARKETS
Slovakia reported arrivals growth of 37.6% from Germany in the first month of
2016. Since visits from Germany represented close to one tenth of total arrivals
to Slovakia, growth of this magnitude is impressive. Germany is also a huge
source markets for Austria, accounting for one third of arrivals in all forms of
paid accommodation establishments which equated to 12 million in 2015.
German arrivals growth of 4.8% and overnights growth of 4.5% to Austria is
therefore significant in volumes terms.
-15
-5
5
15
25
35
Slovakia
Montenegro
Norway
Poland
Croatia
Romania
Iceland
Estonia
Denmark
Finland
Portugal
Malta
Serbia
Austria
Spain
Luxembourg
Hungary
Sweden
Switzerland
Turkey
Monaco
Bulgaria
Arrivals
Nights
German visits and overnights to select destinations
18
out of 22 destinations
reported growth from
Germany pointing to
continued intra-regional
growth in 2016

22
Bulgaria enjoyed a huge influx of Dutch visitors during the first two months of
2016, up 254% compared to the same period in 2015. Although we expect this
will temper as the year progresses, strong growth from the Netherlands to
Bulgaria should be sustainable. The same is true of Montenegro where Dutch
visits and overnights also grew substantially. Meanwhile, a strong Swiss franc
deterred Dutch arrivals and overnights which were 10.0% and 22.1% lower
compared to the first two months of 2015.
A relatively large number of destination markets reported falling arrivals from
France in the first few months of 2016. This is perhaps reflective of the caution
that exists in France at present, but should dissipate as the year progresses
and confidence returns. Montenegro reported the largest falls in French visitor
numbers, down 53.9% based on the first two months of 2016 compared to the
same period of 2015.
-30
-20
-10
0
10
20
30
40
50
60
70
Bulgaria
Montenegro
Slovakia
Serbia
Finland
Portugal
Norway
Luxembourg
Iceland
Romania
Hungary
Poland
Spain
Denmark
Austria
Germany
Estonia
Sweden
Malta
Turkey
Monaco
Croatia
Switzerland
Arrivals
Nights
Dutch visits and overnights to select destinations
Bulgaria, 254% (A)
-55
-35
-15
5
25
45
65
Slovakia
Norway
Poland
Austria
Serbia
Denmark
Portugal
Monaco
Finland
Romania
Spain
Luxembourg
Germany
Hungary
Malta
Switzerland
Iceland
Sweden
Estonia
Croatia
Turkey
Bulgaria
Montenegro
Arrivals
Nights
French visits and overnights to select destinations
Bulgaria may be benefitting
as a lower cost ski
destination for Dutch
travellers

23
The number of nights spent in Denmark by Italians increased dramatically in
the first two months of 2016 compared to the same period in 2015, up 40.6%.
Arrivals to Luxembourg from Italy also increased markedly (+30.0%) in the
same time period. Malta also reported substantial arrivals and overnights from
Italy (by 18.6% and 19.5% respectively) based on data to February. This is
significant given the size of the Italian market as a proportion of total arrivals to
Malta accounting for one seventh of total arrivals.
Spain and Portugal continue to appeal to the UK market, even outside of the
main summer holiday period, despite the increasing choice and access to other
European destination markets. In the first two months of 2016 UK arrivals to
Spain grew by 16.7%, while nights grew by 20.0% compared to the same
period of 2015. Since arrivals from the UK represented close to 25% of total
arrivals to Spain in 2014, growth of this magnitude is also substantial in
absolute terms. In Portugal arrivals from the UK grew by 14.5% and nights by
16.2% in January. Since arrivals from the UK accounted for close to 16% of
total arrivals to Portugal, such growth is significant in absolute terms.
-30
-20
-10
0
10
20
30
40
50
Slovakia
Denmark
Luxembourg
Norway
Finland
Montenegro
Iceland
Portugal
Romania
Malta
Monaco
Croatia
Serbia
Spain
Sweden
Bulgaria
Austria
Estonia
Hungary
Germany
Poland
Switzerland
Turkey
Arrivals
Nights
Italian visits and overnights to select destinations
-25
-15
-5
5
15
25
35
45
55
Slovakia
Serbia
Denmark
Iceland
Poland
Estonia
Romania
Spain
Finland
Portugal
Montenegro
Bulgaria
Germany
Malta
Sweden
Austria
Hungary
Luxembourg
Norway
Switzerland
Croatia
Monaco
Turkey
Arrivals
Nights
UK visits and overnights to select destinations

24
Malta reported mega arrivals growth from Russia (+54.2%), one of only a few
countries to do so in 2016. But given the relative size of the travel flows, this
growth is unlikely to offset the falls to larger, established winter markets for
Russian travel such as Estonia and Finland. More than half of reporting
destinations saw travel from Russia fall in early 2016; arrivals fell most
substantially in Turkey, down 54.4% in the first two months of 2016 compared
to the same period of 2015. Relations between the two nations have been
fragile since the Turkish Air Force shot down a Russian fighter jet for infringing
upon its airspace in November 2015. However, a thawing in relations between
the two has been observed recently and it will be interesting to see how this
manifests itself in tourism performance data as the year progresses.
-55
-45
-35
-25
-15
-5
5
15
25
35
45
55
Malta
Romania
Serbia
Slovakia
Luxembourg
Montenegro
Spain
Croatia
Estonia
Poland
Hungary
Bulgaria
Portugal
Norway
Finland
Switzerland
Germany
Austria
Denmark
Iceland
Sweden
Monaco
Turkey
Arrivals
Nights
Russian visits and overnights to select destinations
18
reported falling arrivals or
overnights from Russia
including large winter
destinations such as Estonia
and Finland

25
6.2 NON-EUROPEAN MARKETS
All but four reporting destinations enjoyed growth from the US in the first
months of 2016 in either arrivals or overnights and air passenger data points to
continued growth to the region throughout Q1. Norway reported the greatest
increase in American visitor numbers, up 245% according to data for the first
two months of the year. Estonia and Slovakia also enjoyed strong growth from
the US with overnights outpacing arrivals to indicate that visitors from the US
are, on average, staying in the country for longer.
Japan’s economy has been in and out of recession over the past few years and
this has been evident in reported outbound tourism performance, while the
weaker yen has hit affordability for international travel. Nonetheless, arrivals
growth was reported in over half of reporting destinations, most notably in
Poland and Estonia where arrivals were up 119% and 84.7% respectively
according to data for the first two months of 2016 compared to same period in
2015. Arrivals from Japan also grew substantially in Montenegro by 70.5% over
the same period.
-40
-20
0
20
40
60
80
100
Norway
Estonia
Slovakia
Iceland
Montenegro
Serbia
Portugal
Denmark
Finland
Bulgaria
Spain
Romania
Germany
Switzerland
Austria
Malta
Poland
Sweden
Hungary
Turkey
Croatia
Monaco
Luxembourg
Arrivals
Nights
US visits and overnights to select destinations
Norway, 245% (N)
-60
-40
-20
0
20
40
60
80
100
Poland
Estonia
Montenegro
Norway
Iceland
Portugal
Sweden
Slovakia
Austria
Finland
Hungary
Spain
Serbia
Denmark
Romania
Switzerland
Germany
Croatia
Monaco
Bulgaria
Luxembourg
Turkey
Arrivals
Nights
Japanese visits and overnights to select destinations
Poland, 119% (A)
19
reported arrivals growth from
the US and strong air
passenger growth suggests
this will continue

26
China continues to be a source of huge arrivals growth for many European
destinations, albeit from some lower volumes than for more established
markets. However, this early data is consistent with some slower growth from
China, indicated by some weaker air passenger data. Converse to data
pertaining to Japan, Chinese overnights growth outstripped arrivals in many
destinations including Montenegro, Croatia, Austria, and Germany. This
indicates that in these destinations the average length of a Chinese visit is
increasing. This may be linked to the closure of some EU borders at the
beginning of the year which will have added a degree of inconvenience for the
Chinese visitors wishing to visit as many European destinations in a single trip
as they might have done previously.
All but three reporting destinations enjoyed arrivals growth from India. Germany
was one destination which saw Indian arrivals and overnights fall based on
data for the first two months of year compared to the same month of 2015. And
although the number of Indians arriving in Finland grew (+23.6%), the number
of Indian overnights fell by 16.9%.
-20
0
20
40
60
80
100
120
Montenegro
Hungary
Iceland
Finland
Croatia
Romania
Norway
Slovakia
Sweden
Poland
Luxembourg
Germany
Austria
Spain
Bulgaria
Monaco
Serbia
Estonia
Denmark
Switzerland
Turkey
Arrivals
Nights
Chinese visits and overnights to select destinations
-15
5
25
45
65
85
Croatia
Romania
Austria
Poland
Montenegro
Bulgaria
Sweden
Finland
Hungary
Denmark
Monaco
Spain
Switzerland
Germany
Slovakia
Turkey
Arrivals
Nights
Indian visits and overnights to select destinations
Croatia, 142% (N) & 106% (A)

27
Some destinations reported substantial arrivals and overnights growth from
Canada in the first few months of 2016. In January, Finland reported arrivals
growth of 175% and overnights growth of 701% compared to January 2015,
albeit on some small volumes, associated with their hosting of the Ice-Hockey
Junior Championships. Slovakia was similarly prosperous receiving 113% more
Canadian arrivals in January 2016 than in January 2015, and 88.7% more
Canadian overnights over the same period. But with only data for January
available for these countries, it is very unlikely that this growth can be sustained
as the year progresses.
-30
-10
10
30
50
70
90
Finland
Slovakia
Sweden
Portugal
Hungary
Monaco
Denmark
Bulgaria
Spain
Austria
Iceland
Croatia
Switzerland
Poland
Romania
Germany
Serbia
Turkey
Montenegro
Arrivals
Nights
Canadian visits and overnights to select destinations
Finland, 701% (N) & 175% (A)
Slovakia, 113% (A)

28
7. ORIGIN MARKET SHARE ANALYSIS
METHODOLOGY
Based on the Tourism Decision Metrics (TDM) model, the following charts and analysis show
Europe’s evolving market position – in absolute and percentage terms – for selected source
markets. 2015 values are, in most cases, year-to-date estimates based on the latest available
data and are not final reported numbers.
Data in these charts and tables relate to reported arrivals in all destinations as a comparable
measure of outbound travel for calculation of market share.
For example, US outbound figures featured in the analysis are larger than reported departures
in national statistics as long haul trips often involve travel to multiple destinations. In 2014 US
data reporting shows 11.9m departures to Europe while the sum of European arrivals from the
US was 23.4m. Thus each US trip to Europe involved a visit to two destinations on average.
The geographies of Europe are defined as follows:
Northern Europe is Denmark, Finland, Iceland, Ireland, Norway, Sweden, and the UK;
Western Europe is Austria, Belgium, France, Germany, Luxembourg, Netherlands, and
Switzerland;
Southern/Mediterranean Europe is Albania, Bosnia-Herzegovina, Croatia, Cyprus, FYR
Macedonia, Greece, Italy, Malta, Montenegro, Portugal, Serbia, Slovenia, Spain, and Turkey;
Central/Eastern Europe is Armenia, Azerbaijan, Bulgaria, Czech Republic, Estonia, Hungary,
Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Poland, Romania, Russian Federation, Slovakia,
and Ukraine.

29
7.1 UNITED STATES
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Rest of Long Haul Central/Eastern Europe
Southern Europe Western Europe
Northern Europe
*Long haul defined as tourist arrivals to destinations outside North America
Visits, 000s
US Long Haul* Outbound Travel
2005 2007 2009 2011 2013 2015 2017 2019
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Northern Europe Western Europe
Southern Europe Central/Eastern Europe
% share of long haul* market
Europe's Share of US Market
US Market Share Summary
2016
Total outbound travel (000s) 102,575 - 4.7% 25.9% - 33.0% -
Long haul (000s) 61,921 60.4% 5.6% 31.2% 62.9% 31.6% 61.0%
Short haul (000s) 40,654 39.6% 3.3% 17.8% 37.1% 35.2% 39.0%
Travel to Europe (000s) 27,216 26.5% 5.7% 31.9% 27.8% 31.8% 26.8%
Northern Europe (000s) 6,392 6.2% 6.0% 34.1% 6.6% 29.6% 6.4%
Western Europe (000s) 9,682 9.4% 3.9% 21.2% 9.1% 23.6% 10.2%
Southern Europe (000s) 7,315 7.1% 6.4% 36.6% 7.7% 36.0% 7.0%
Central/Eastern Europe (000s) 3,828 3.7% 7.9% 46.3% 4.3% 53.1% 3.2%
*Shows cumulative change over the relevant time period indicated
**Shares are expressed as % of total outbound travel
Growth (2016-21) Growth (2011-16)
Level Share**
Annual
average
Cumulative
growth*
Share 2021**
Cumulative
growth*
Share 2011**

30
7.2 CANADA
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Northern Europe
Visits, 000s
Canada Long Haul* Outbound Travel
2005 2007 2009 2011 2013 2015 2017 2019
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Europe's Share of Canadian Market
Canada Market Share Summary
2016
Long haul (000s) 11,907 35.1% 4.9% 27.0% 35.5% 10.8% 32.7%
Short haul (000s) 22,051 64.9% 4.5% 24.5% 64.5% -0.2% 67.3%
Northern Europe (000s) 1,083 3.2% 8.0% 46.9% 3.7% 7.5% 3.1%
Western Europe (000s) 1,711 5.0% 3.3% 17.9% 4.7% 11.5% 4.7%
Central/Eastern Europe (000s) 260 0.8% 3.1% 16.6% 0.7% 3.1% 0.8%
*Show s cumulative change over the relevant time period indicated
Growth (2016-21) Growth (2011-16)
Level Share**
Annual
average
Cumulative
growth*
Share 2021**
Cumulative
growth*
Share 2011**

31
7.3 MEXICO
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Northern Europe
Visits, 000s
Mexico Long Haul* Outbound Travel
2005 2007 2009 2011 2013 2015 2017 2019
0%
5%
10%
15%
20%
25%
30%
35%
Europe's Share of Mexican Market
Mexico Market Share Summary
2016
Long haul (000s) 2,944 13.5% 4.5% 24.6% 13.5% 47.4% 12.7%
Short haul (000s) 18,814 86.5% 4.5% 24.6% 86.5% 37.0% 87.3%
Northern Europe (000s) 116 0.5% 3.7% 20.1% 0.5% 40.4% 0.5%
Western Europe (000s) 640 2.9% 3.7% 20.1% 2.8% 3.6% 3.9%
Southern Europe (000s) 585 2.7% 0.7% 3.7% 2.2% 50.6% 2.5%
Growth (2016-21) Growth (2011-16)
Level Share**
Annual
average
Cumulative
growth*
Share 2021**
Cumulative
growth*
Share 2011**

32
7.4 ARGENTINA
0
500
1,000
1,500
2,000
2,500
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Rest of Long Haul
Central/Eastern Europe
Southern Europe
Western Europe
Northern Europe
*Long haul defined as tourist arrivals to destinations outside South America
Visits, 000s
Argentina Long Haul* Outbound Travel
2005 2007 2009 2011 2013 2015 2017 2019
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Europe's Share of Argentinian Market
Argentina Market Share Summary
2016
Long haul (000s) 2,334 29.6% 2.7% 14.2% 30.3% 21.7% 27.9%
Short haul (000s) 5,557 70.4% 2.0% 10.1% 69.7% 11.9% 72.1%
Travel to Europe (000s) 930 11.8% 3.6% 19.5% 12.6% 42.0% 9.5%
Western Europe (000s) 45 0.6% 2.7% 14.0% 0.6% 21.5% 0.5%
Growth (2016-21) Growth (2011-16)
Level Share**
Annual
average
Cumulative
growth*
Share 2021**
Cumulative
growth*
Share 2011**

33
7.5 BRAZIL
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Northern Europe
Visits, 000s
Brazil Long Haul* Outbound Travel
2005 2007 2009 2011 2013 2015 2017 2019
0%
5%
10%
15%
20%
25%
30%
35%
Europe's Share of Brazilian Market
Brazil Market Share Summary
2016
Long haul (000s) 6,608 71.0% 2.6% 13.5% 71.6% 16.0% 69.2%
Short haul (000s) 2,697 29.0% 2.0% 10.4% 28.4% 6.4% 30.8%
Travel to Europe (000s) 3,180 34.2% -0.1% -0.5% 30.2% 2.0% 37.9%
Western Europe (000s) 1,459 15.7% -0.4% -1.8% 13.7% 5.9% 16.7%
Southern Europe (000s) 1,135 12.2% -2.4% -11.3% 9.6% -5.1% 14.5%
Growth (2016-21) Growth (2011-16)
Level Share**
Annual
average
Cumulative
growth*
Share 2021**
Cumulative
growth*
Share 2011**

34
7.6 INDIA
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Northern Europe
*Long haul defined as tourist arrivals to destinations outside South Asia
Visits, 000s
India Long Haul* Outbound Travel
2005 2007 2009 2011 2013 2015 2017 2019
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
*Long haul defined as tourist arrivals to destinations outside South Asia
Europe's Share of Indian Market
India Market Share Summary
2016
Long haul (000s) 14,346 94.9% 7.7% 44.8% 95.2% 45.3% 94.7%
Short haul (000s) 764 5.1% 6.4% 36.4% 4.8% 39.3% 5.3%
Western Europe (000s) 884 5.9% 6.1% 34.2% 5.4% 43.7% 5.9%
Growth (2016-21) Growth (2011-16)
Level Share**
Annual
average
Cumulative
growth*
Share 2021**
Cumulative
growth*
Share 2011**

35
7.7 CHINA
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Rest of Long Haul
Central/Eastern Europe
Southern Europe
Western Europe
Northern Europe
*Long haul defined as tourist arrivals to destinations outside Northeast Asia
Visits, 000s
China Long Haul* Outbound Travel
2005 2007 2009 2011 2013 2015 2017 2019
0%
5%
10%
15%
20%
25%
Europe's Share of Chinese Market
China Market Share Summary
2016
Long haul (000s) 40,480 45.5% 7.9% 46.0% 47.6% 184.0% 35.0%
Short haul (000s) 48,416 54.5% 6.1% 34.3% 52.4% 83.0% 65.0%
Western Europe (000s) 6,635 7.5% 9.0% 53.8% 8.2% 165.5% 6.1%
Central/Eastern Europe (000s) 3,930 4.4% 8.1% 47.7% 4.7% 119.6% 4.4%
Growth (2016-21) Growth (2011-16)
Level Share**
Annual
average
Cumulative
growth*
Share 2021**
Cumulative
growth*
Share 2011**

36
7.8 JAPAN
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Northern Europe
Visits, 000s
Japan Long Haul* Outbound Travel
2005 2007 2009 2011 2013 2015 2017 2019
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Europe's Share of Japanese Market
Japan Market Share Summary
2016
Total outbound travel (000s) 21,790 - 5.7% 32.1% - -1.1% -
Long haul (000s) 14,285 65.6% 6.1% 34.4% 66.7% 14.0% 56.9%
Short haul (000s) 7,505 34.4% 5.0% 27.7% 33.3% -21.0% 43.1%
Western Europe (000s) 2,230 10.2% 4.3% 23.6% 9.6% 13.3% 8.9%
Growth (2016-21) Growth (2011-16)
Level Share**
Annual
average
Cumulative
growth*
Share 2021**
Cumulative
growth*
Share 2011**

37
7.9 UNITED ARAB EMIRATES
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Northern Europe
*Long haul defined as tourist arrivals to destinations outside Middle East
Visits, 000s
UAE Long Haul* Outbound Travel
2005 2007 2009 2011 2013 2015 2017 2019
0%
5%
10%
15%
20%
25%
30%
*Long haul defined as tourist arrivals to destinations outside Middle East
Europe's Share of Emirati Market
United Arab Emirates Market Share Summary
2016
Long haul (000s) 1,556 42.7% 3.3% 17.7% 36.6% 34.3% 40.4%
Short haul (000s) 2,087 57.3% 8.8% 52.1% 63.4% 21.9% 59.6%
Travel to Europe (000s) 922 25.3% 3.0% 15.9% 21.3% 39.2% 23.1%
Western Europe (000s) 379 10.4% 1.0% 4.9% 7.9% 33.6% 9.9%
Central/Eastern Europe (000s) 24 0.7% 5.8% 32.8% 0.6% -16.1% 1.0%
Growth (2016-21) Growth (2011-16)
Level Share**
Annual
average
Cumulative
growth*
Share 2021**
Cumulative
growth*
Share 2011**

38
7.10 RUSSIA
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Rest of World Central/Eastern Europe
Northern Europe
*Long haul defined as tourist arrivals to all destinations
Visits, 000s
Russia Long Haul* Outbound Travel
2005 2007 2009 2011 2013 2015 2017 2019
0%
10%
20%
30%
40%
50%
60%
70%
*Long haul defined as tourist arrivals to all destinations
Europe's Share of Russian Market
Russia Market Share Summary
2016
Total outbound travel (000s) 25,945 - 8.2% 48.2% - -15.6% -
Long haul (000s) 6,929 26.7% 6.3% 35.6% 24.4% 14.4% 19.7%
Short haul (000s) 19,016 73.3% 8.9% 52.8% 75.6% -23.0% 80.3%
Travel to Europe (000s) 19,016 73.3% 8.9% 52.8% 75.6% -23.0% 80.3%
Northern Europe (000s) 1,210 4.7% 6.8% 39.2% 4.4% -25.7% 5.3%
Western Europe (000s) 1,664 6.4% 5.1% 28.2% 5.5% 0.1% 5.4%
Central/Eastern Europe (000s) 9,314 35.9% 9.6% 58.0% 38.3% -36.9% 48.0%
Growth (2016-21) Growth (2011-16)
Level Share**
Annual
average
Cumulative
growth*
Share 2021**
Cumulative
growth*
Share 2011**

39
8. ECONOMIC OUTLOOK
Assessing recent tourism data and industry performance is a useful way of directly monitoring
the key trends for travel demand across Europe. This can be complemented by looking at key
trends and relationships in macroeconomic performance in Europe’s key source markets
which can provide further useful insight into likely tourism developments throughout the year.
The linkages between macro and tourism performance can be very informative. For example,
strong GDP or consumer spending growth is an indication of rising prosperity with people more
likely to avail of international travel. It is also an indication of rising business activity and
therefore stronger business travel. Movements in exchange rates against the euro can be
equally important as it can influence choice of destination. For example, if the euro appreciated
(gained value) against the US dollar, the Eurozone would become a more expensive
destination and therefore potentially less attractive for US visitors. Conversely, depreciation of
the euro against the US dollar would make the Eurozone a relatively cheaper destination and
therefore more attractive to US travellers.
8.1 OVERVIEW
FORECASTS STEADY BUT NEAR-TERM SIGNALS MIXED
2016 has got off to a shaky start, with sharp declines in global equity markets
and renewed jitters about China and its currency. Recent asset market trends
have prompted some observers to suggest a high risk of a global recession this
year. Our world growth forecasts are steady this month, at 2.3% for 2016 and
2.7% for 2017. One factor behind the more stable outlook is the rally in financial
markets since mid-February. This rally appears to have been the result of a
number of factors including a more dovish Fed and an improvement in some
near-term economic indicators.
The implied 12-month ahead Fed funds rate dropped around 0.5% from its
January peak to mid-February and remains around 0.35% lower now. So the
0.20
0.40
0.60
0.80
1.00
400
420
440
460
480
500
520
Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16
World: Fed rate expectations and stocks
Index
Source : Oxford Economics/Haver Analytics
12-month ahead
implied Fed Funds
rate (RHS)
FTSE world
%

40
Fed still apparently has the capacity to boost markets with changes in
communication policy.
The Citigroup economic surprise indicators have also improved over recent
weeks, especially for emerging markets where the indicator is back in positive
territory. The G10 index nevertheless remains clearly negative. Other economic
signals are mixed. The latest reading of OE’s world trade indicator (based on
survey evidence for March) suggests a modest improvement, although again
the indicator continues to signal weak world trade growth.
Meanwhile, there have been some warnings of potentially softer labour market
conditions. Though payrolls gains have remained solid, a weighted sum of the
employment subindices of the US ISM surveys has dropped sharply over
recent months. A similar index for the Eurozone is more positive, although it
has also softened from its late-2015 peaks. These mixed signals suggest
limited likelihood of near-term upgrades to the world growth outlook and overall
we maintain our view from last month that risks look skewed to the downside
such that further monetary policy stimulus remains a possibility.
This assessment appears to be shared, to some extent at least, by global bond
markets. US 10-year yields have dropped back to only 1.7% since mid-March
(only 0.1% above their February lows), with German yields at just 0.1% and
Japanese yields at -0.1%. And so the ‘great squeeze’ on G7 bond yields is still
continuing.
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
30
35
40
45
50
55
60
2006 2008 2010 2012 2014 2016
US employment and world trade trends
Index, breakeven=50
OE world trade
indicator (RHS)US ISM
employment*
(LHS)
* Employment sub-indices of
ISM surveys, weighted 88%
services/12% manufacturing
Standardised Index

41
Summary of economic outlook, % change year ago*
UK 2.1% 2.5% -0.3% -7.1% 0.5% 2.3% 2.1% 0.0% 5.1% 1.4%
France 1.4% 1.3% -0.1% 0.0% 0.1% 1.7% 1.7% -0.4% 0.0% 1.2%
Germany 1.7% 1.9% -0.2% 0.0% 0.5% 1.9% 1.7% 0.2% 0.0% 1.8%
Netherlands 1.6% 1.6% -0.6% 0.0% 0.5% 1.9% 2.0% 0.1% 0.0% 1.6%
Italy 1.0% 1.2% -0.4% 0.0% 0.1% 1.3% 1.1% -0.3% 0.0% 1.5%
Russia -2.1% -5.5% 0.3% -16.0% 7.6% 0.8% -0.4% 0.0% 5.8% 5.7%
US 2.0% 2.6% -0.4% 2.2% 1.0% 2.4% 2.5% -0.3% 2.0% 2.0%
Canada 1.1% 1.0% 0.4% -2.9% 1.3% 2.2% 1.7% -0.1% 3.2% 2.1%
Brazil -4.4% -4.7% 3.3% -14.3% 8.6% -0.3% -1.6% 1.9% -9.7% 5.6%
China 6.5% 7.5% 0.0% -4.0% 2.2% 6.2% 7.0% 0.0% 0.9% 2.1%
Japan 0.5% -0.1% -0.2% 7.1% 0.1% 0.3% 0.3% -0.2% -3.7% 2.3%
India 7.4% 7.0% -0.1% -1.6% 5.4% 7.2% 7.1% 0.0% 1.4% 5.2%
* Unless otherw ise specified
** Percentage point change
2016 2017
Country
*** Exchange rates measured against the euro. A positive change indicates stronger local currency against the euro and therefore a positive impact on
outbound tourism demand. A negative change indicates w eaker local currency against the euro and therefore a negative impact on outbound tourism
demand.
GDP
Consumer
expenditure
Unemploy-
ment **
Exchange
rate***
Inflation
Consumer
expenditure
Unemploy-
ment *
Exchange
rate***
InflationGDP

42
8.2 EUROZONE
Although external weakness is still weighing on the Eurozone recovery, the
gradual domestic healing that we have seen take place over the past couple of
years remains firmly in place.
On the whole the timely activity data appear to paint conflicting messages
about the likely pace of GDP growth in Q1. Despite ticking up in March, the
composite PMI over Q1 as a whole recorded its lowest average reading since
Q1 2015. By contrast, retail sales, new car registrations and industrial
production are all on track to grow at a much faster pace in Q1 than Q4.
Typically, with two of three monthly readings available for most of the hard
indicators, we would put more weight on the hard data than the surveys,
implying that GDP growth strengthened in Q1. Indeed, reflecting the strength of
hard data our GDP indicator suggests that the risks to our forecast for GDP
growth to rise to 0.5% in Q1 lie to the upside.
Much of the pick-up in growth in Q1 is likely to reflect temporary factors. In
particular, both industry and construction growth is unlikely to maintain the
expected robust pace of expansion recorded in Q1, suggesting that growth
should slow in Q2.
Nonetheless, the domestic recovery is likely to continue into the second half of
the year. Indeed, while we have cut our 2016 GDP growth forecast since the
beginning of the year in response to external weakness, our forecast for
domestic demand growth has inched up from 1.9% to 2.1% on the back of
signs that the recovery may be broadening from household spending.
The GDP growth forecast for 2016 is 1.6%. Next year we expect growth of
1.8%. While this pace of growth should ensure that deflation is not a worry, a
very gradual pick-up of inflation is expected. Further negative shocks would
mount pressure on the ECB to do more.
-4
-3
-2
-1
0
1
2
2000 2003 2006 2009 2012 2015
GDP % q/q
GDP Indicator
Source: Oxford Economics/Haver Analytics
Euro area GDP indicator
% q/q

43
8.3 UNITED KINGDOM
2015 ended on a disappointing note with the National Accounts for Q3 2015
seeing downward revisions to quarterly GDP growth in both Q2 (from 0.7% to
0.5%) and Q3 (from 0.5% to 0.4%). Although we remain on course to see an
uptick in growth to around 0.6% in Q4, we are likely to see the preliminary
estimate for 2015 as a whole come in at just 2.2%. This would be well down on
2014 and would be particularly disappointing given the extent to which the
economy has benefitted from very low inflation and a sizeable amount of spare
capacity.
The expenditure breakdown confirmed growth in Q3 was driven exclusively by
the domestic economy and in particular the consumer sector. However, the
data for inventories and trade shows such volatility from quarter-to-quarter that
there are sizable question marks about its reliability: we would be surprised if
there were not significant revisions over the coming quarters, continuing the
pattern of recent years.
More positively, the larger trade deficit in Q3 was not reflected in a widening of
the current account deficit. This was due to a decline in the deficit on primary
(or net investment) income. This component had been largely responsible for
the deterioration in the UK current account since the financial crisis, reflecting
the poor performance of UK investments abroad. But with our key trading
partners forecast to enjoy stronger economic growth over the coming years, the
performance of UK investments abroad should continue the recent
improvement, moving the primary income balance back into surplus.
Recent speeches and media interviews by MPC members have focused on the
need to see a sustained pickup in wage growth before there was a possibility of
interest rates increasing. While compositional effects, chiefly a drop in hours
worked, are largely to blame for the recent slowdown in wage growth, we
expect the pickup in pay to be gradual and, therefore, see a growing risk that
the first rate rise will come later than our forecast of Q4 2016.
-6
-4
-2
0
2
4
6
2004 2006 2008 2010 2012 2014 2016 2018
% year
Consumer spending
Real disposable
income
Forecast
UK: Consumer spending and income

44
8.4 UNITED STATES
Real GDP growth was revised up to 1.4% (seasonally adjusted annual rate) in
Q4 2015 with final sales up 1.6% and inventories subtracting 0.2pp from
growth. Consumer spending and residential investment supported growth while
business investment and trade were significant drags on economic activity.
Employment growth remains firm with payrolls advancing a solid 215,000 in
March, wages rebounding 0.3% on the month, and the participation rate rising
to 63%. We continue to expect stronger wage growth this year as labour
market slack dissipates.
Adjusted for inflation, disposable income rose 0.3% in February, and
maintained a fairly solid 2.7% year-on-year pace. Consumer spending was
2.8% higher than a year earlier and is expected to grow by 2.6% in 2016 as a
whole. Additionally, residential investment remains strong, and is expected to
contribute 0.3pp to growth this year. However, the housing recovery continues
to be very gradual and tight inventory, especially in the new homes segment,
remains a constraint.
Business investment is depressed, growing only 1.5% y/y in Q4 2015. Most
forward-looking indicators point to a subdued trend through the remainder of
the year with growth averaging 1.3% in 2016. Exports remain feeble but import
growth is constrained by well-provisioned inventories. This in conjunction with
more subdued consumer spending momentum in Q1, means we have cut our
2016 GDP growth forecast 0.1pp to 2.0%, and expect growth of 2.4% in 2017.
Inflation rebounded strongly between September and January, but we foresee
it subsiding modestly over the summer on weaker base effects. We see annual
headline PCE and core PCE inflation at 1.1% and 1.8% this year.
In light of the Fed’s relatively cautious stance and our reserved growth and
inflation outlook, we expect the Fed will hold off until September before raising
interest rates. We see another rate hike in December, followed by three more in
2017.

45
8.5 JAPAN
The latest data suggest that the economy remained weak in Q1 but has likely
avoided overall contraction and therefore recession. Consumer spending
appears to have staged a modest revival while goods exports are holding up so
far. Much depends on business investment where there is no advanced data.
But it is worth noting that the latest Tankan survey reported expectations of a
fall in profits and weak investment intentions for fiscal 2016.
The strength of the yen is now a worry with the Finance Minister expressing
concern about the currency, but direct intervention to reduce the value of the
yen is not likely ahead of a G7 summit in Tokyo at the end of May.
The Bank of Japan is likely to ease policy again soon, possibly as soon as the
next policy meeting concluding on 29
th
April. We expect a 10bp cut in the
deposit rate to -0.2%. Inflation expectations are falling on all measures
(consumer and business surveys, financial markets and economists’ forecasts)
and are lower now than before the BoJ negative interest rate announcement in
January. This adds to the risk of a return to deflation, already present with
negligible economic growth and zero actual inflation.
Action on fiscal policy is also probable with an additional boost expected to be
announced before the summer and before elections to the upper house of the
Diet. Extra spending is likely to be concentrated on the household sector in an
attempt to boost consumption ahead of the scheduled consumption tax
increase in April 2017. That rise, from 8% to 10%, is still our baseline,
especially after recent comments by Prime Minister Abe reaffirming the
intention to go ahead. But it may still be in jeopardy if both the economy and
consumption are very weak in coming months.
We retain our GDP forecasts for 2016 at 0.5% and for 2017 at 0.3% (assuming
consumption tax increase). Our forecast for near-zero CPI inflation in 2016 is
now the consensus and also remains. The strength of the yen means the yen-
US dollar profile has changed but we still have a depreciation to ¥117 by year-
end.
-3
-2
-1
0
1
2
3
Feb-06 Feb-08 Feb-10 Feb-12 Feb-14 Feb-16
CPI exc fresh food
CPI exc fresh food and energy
Inflation
%
2% inflation target

46
8.6 EMERGING MARKETS
CHINA GROWTH UPGRADED; POLICY FEEDS THROUGH
There are increasing signs that the fiscal stimulus and improvement in property
construction are feeding through to boost overall economic activity. Moreover,
the official manufacturing PMI rose above 50 for the first time in eight months in
March, driven by stronger output and new orders.
As a result, we have revised our forecast for GDP growth this year to 6.5%
from 6.2% previously. This also ties in with the stronger emphasis policymakers
appeared to place on meeting the 6.5-7% target for 2016 growth at the National
Peoples’ Congress in early March. The Government Work Report presented by
Premier Li stressed that the aim to double GDP and per capita income by 2020,
set in 2010, calls for average growth of at least 6.5% in 2016-20. We have also
raised our forecast for 2017 growth to 6.2% from 6% last month.
We no longer expect the PBoC to cut benchmark interest rates further this year
(previously we had two 25bp rate cuts in the baseline). There are a few
reasons. The recent stimulus is already taking effect. Also, given that deposit
rates are already very low at 1.5%, a further fall would drive real interest rates
further into negative territory – something the PBoC traditionally likes to avoid.
And a further narrowing of interest rate differentials would put the currency
under more pressure.
Instead, we see the PBoC continuing to use open market operations and
cutting the reserve requirement ratio further to keep liquidity ample, encourage
more bank lending and keep interbank rates low and stable. The target for
credit growth this year is 13% (up from a 12% target in 2015); including the
bond issuance of provinces it is 16%. Thus, concerns about China’s rising debt
notwithstanding, policymakers are not targeting deleveraging this year.
35
40
45
50
55
60
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Official
PMI
Caixin PMI
China: Manufacturing PMI
50 = expansion / contraction line
Source: China Federation of Logistics and Purchasing / Markit

47
THREE YEARS OF RECESSION FOR FRAGILE BRAZIL
Hit by lower oil prices, Mexico has announced a sizeable cut to spending worth
0.7% of GDP to take place in 2016 and 2017, dampening GDP growth.
Moreover, we do not rule out the possibility of more cuts in coming quarters. In
Brazil, the vote of President Rousseff’s impeachment in the lower house is
scheduled for 17th April, and it is hard to say whether or not her weakened
ruling coalition will manage to secure one third of the votes required to keep her
in power.
Meanwhile, markets rallied on the expectation of a political change, taking the
real to levels last seen before the ratings downgrade in September. On the
activity front, it remains business as usual with all the leading indicators
pointing to a weak start to the year. We now expect GDP to contract by 4.4%
this year. The slightly stronger real, coupled with weaker activity and a sharper
labour market deterioration, should marginally help to ease inflation.
-2
-1
0
1
2
3
4
5
6
7
8
9
2000 2003 2006 2009 2012 2015 2018
% year
Inflation
3 month
interbank rate
China: Monetary conditions
F'cast
1 year
lending rate
-28
-21
-14
-7
0
7
14
21
28
35
-12
-9
-6
-3
0
3
6
9
12
15
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
% year
US non-oil import
volumes (RHS)
Source: Haver Analytics
Mexican GDP & US non-oil import volumes
% year
Mexican monthly
GDP proxy (LHS)

48
NO FISCAL OR MONETARY POLICY SPACE IN RUSSIA
Russia’s short-term economic outlook remains bleak. Indeed, despite lower
inflation and the strengthening rouble, the Central Bank of Russia kept interest
rates on hold at the March policy meeting, citing concern over the fragility of the
oil price rally and the risks to inflation from the uncertain budget policy.
Although Russia has large fiscal buffers and ample borrowing capacity, a
tighter fiscal stance will still be required to contain a widening budget deficit,
which we estimate will reach 4.6% of GDP in 2016, further weighing on growth.
TURKEY SURPRISED IN 2015, BUT OUTLOOK FRAGILE
Turkey grew by 4% in 2015, defying political turbulence and beating
expectations to become one of the fastest-growing emerging markets last year.
Private consumption remained resilient to the domestic uncertainty and public
spending was very strong. But we do not expect the outperformance to persist
in 2016; rather, we expect growth to moderate to 3.3% this year. At the final
MPC meeting of his term in office, Central Bank of the Republic of Turkey
governor Basci unexpectedly cut the overnight lending rate by 25bp to 10.5%,
taking advantage of the recent lira rally, but kept the one-week repo rate steady
at 7.5%. We now think that the latter will be held throughout this year.
-8
-6
-4
-2
0
2
4
6
8
10
2005 2007 2009 2011 2013 2015 2017 2019
December baseline
Lower oil price forecast
Russia: Lower oil price widens deficit
% GDP
Forecast

49
INDIA CUTS RATES, BUT RISKS STILL TO DOWNSIDE
Having maintained policy on hold since September the Reserve Bank of India
(RBI) cut interest rates at its April meeting. However, this was largely
anticipated. The key focus of the meeting was on strengthening the monetary
policy transmission mechanism. To this end, the RBI announced several
measures (including a narrower interest rate corridor) and indicated a shift in its
liquidity management framework towards a more neutral setting as compared
to the current practice of maintaining a deficit. We think this is a significant
development and should ensure speedier transmission of policy easing to the
real economy. We do not rule out the possibility of further easing later in the
year but we await more clarity on the trajectory of inflation (given the
approaching monsoon) and the fiscal consolidation path. With modest fiscal
consolidation likely to be offset by modest easing in monetary policy, we have
left our 2016 and 2017 annual GDP growth forecasts unchanged at 7.4% and
7.2% but the risks to our forecast remain to the downside.
-6
-4
-2
0
2
4
6
8
10
12
14
2004 2006 2008 2010 2012 2014 2016
% year
Repo rate
India: Interest rates and wholesale prices
Mumbai 3-month
offered rate
Wholesale prices
(WPI) inflation

50
9. APPENDIX 1
GLOSSARY OF COMMONLY USED TERMS AND ABBREVIATIONS
Airline industry indicators
ASK – Available Seat Kilometers. Indicator of airline supply, available seats x kilometers flown;
PLF – Passenger Load Factor. Indicator of airline capacity. Equal to revenue passenger
kilometers (RPK) / available seat kilometers (ASK);
RPK – Revenue Passenger Kilometers. Indicator of airline demand, paying passenger x
kilometers flown;
3mth mav – Three month moving average.
Hotel industry indicators
ADR – Average Daily Rate. Indicator of hotel room pricing, equal to hotel room revenue /
rooms sold in a given period;
Occ – Occupancy Rate. Indicator of hotel performance, equal to the number of hotel rooms
sold / room supply;
RevPAR – Revenue per Available Room. Indicator of hotel performance, equal to hotel room
revenue / rooms available in a given period.
Central Banks
BoE – Bank of England;
MPC – Monetary Policy Committee of BoE;
BoJ – Bank of Japan;
ECB – European Central Bank;
Fed – Federal Reserve (US);
RBI – Reserve Bank of India;
OBR – Office for Budget Responsibility;
PBoC – People’s Bank of China.
Economic indicators and terms
BP – Basis Point. A unit equal to one hundredth of a percentage point;
Broad money – Key indicator of money supply and liquidity including currency holdings as
well as bank deposits that can easily be converted to cash;

51
CPI – Consumer Price Index. Measure of price inflation for consumer goods;
FDI – Foreign Direct Investment. Investment form one country into another, usually by
companies rather than governments;
GDP – Gross Domestic Product. The value of goods and services produced in a given
economy;
LCU – Local Currency Unit. The national unit of currency of a given country, e.g., pound, euro,
etc.;
PMI – Purchasing Managers’ Index. Indicator of producers’ sentiment and the direction of the
economy;
PPI – Purchase Price Index. Measure of inflation of input prices to producers of goods and
services;
PPP – Purchasing Power Parity. An implicit exchange rate which equalises the price of
identical goods and services in different countries so they can be expressed with a common
price;
QE – Quantitive Easing. Expansionary monetary policy pursued by central banks involving
asset purchases to reduce bond yields and increase liquidity in capital markets;
G7 – Group of seven industrialised countries comprising the United States, the United
Kingdom, France, Germany, Italy, Canada, and Japan.

52
10. APPENDIX 2
ETC MEMBER ORGANISATIONS
Austria – Austrian National Tourist Office (ANTO)
Belgium: Flanders – Tourism Flanders
Wallonia – Wallonie-Bruxelles Tourisme (WBT)
Bulgaria – Bulgarian Ministry of Tourism
Croatia – Croatian National Tourist Board (CNTB)
Cyprus – Cyprus Tourism Organisation (CTO)
Czech Republic – CzechTourism
Denmark – VisitDenmark
Estonia – Estonian Tourist Board - Enterprise Estonia
Finland – Visit Finland – Finpro ry
Germany – German National Tourist Board (GNTB)
Greece – Greek National Tourism Organisation (GNTO)
Hungary – Hungarian Tourism Ltd.
Iceland – Icelandic Tourist Board
Ireland – Fáilte Ireland and Tourism Ireland Ltd.
Italy – Italian Government Tourist Board
Latvia – Latvian Tourism Development Agency (TAVA)
Lithuania – Lithuanian State Department of Tourism
Luxembourg – Luxembourg for Tourism (LFT)
Malta – Malta Tourism Authority (MTA)
Monaco – Monaco Government Tourist and Convention Office (DTC)
Montenegro – National Tourism Organisation of Montenegro
Norway – Innovation Norway
Poland – Polish Tourist Organisation (PTO)
Portugal – Turismo de Portugal, I.P.
Romania – Romanian National Authority for Tourism
San Marino – State Office for Tourism
Serbia – National Tourism Organisation of Serbia (NTOS)
Slovakia – Slovak Tourist Board
Slovenia – Slovenian Tourist Board
Spain – Turespaña - Instituto de Turismo de España
Switzerland – Switzerland Tourism
Turkey – Ministry of Culture and Tourism

EUROPEAN TRAVEL COMMISION - REPORT TRENDS AND PROSPECTS 2016

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